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Exhibit 99.1

 

Press Release

 

Clean Harbors Reports First-Quarter 2014 Financial Results

 

 

·            Company Achieves Q1 Revenue and Adjusted EBITDA In Line with Guidance

·            Reports Q1 Revenue of $846.7 Million, EPS of $0.15; Adjusted EBITDA of $102.0 Million

·            Year-over-year Results Reflect Effects of Currency Translation and Adverse Weather

·            Concludes Quarter with Strong March Performance and Sales Momentum

·            Cost Reduction Efforts Proceeding On Plan

·            Company Confirms 2014 Revenue and Adjusted EBITDA Guidance

 

Norwell, Mass. – May 7, 2014 – Clean Harbors, Inc. (“Clean Harbors”) (NYSE: CLH), the leading provider of environmental, energy and industrial services throughout North America, today announced financial results for the first quarter ended March 31, 2014.

 

Revenues for the first quarter were $846.7 million compared with $862.2 million in the same period in 2013.  Income from operations in the first quarter of 2014 was $29.9 million compared with $34.8 million in the same period of 2013.

 

First-quarter 2014 net income was $9.0 million, or $0.15 per diluted share, compared with $10.5 million, or $0.17 per diluted share, in the first quarter of 2013.  First-quarter 2014 net income was reduced by $4.7 million of pre-tax integration and severance costs.  First-quarter 2013 net income included pre-tax adjustments related to acquisition accounting of $13.6 million, as well as approximately $5.7 million in integration and severance costs.

 

Adjusted EBITDA (see description below) in the first quarter of 2014 was $102.0 million compared with $111.2 million in the same period of 2013.

 

Comments on the First Quarter

 

“We ended the first quarter with a strong finish, exceeding our revenue guidance and reporting Adjusted EBITDA in line with our expectations,” said Alan S. McKim, Chairman and Chief Executive Officer. “Adverse weather affected our business in the first two months of the quarter, but conditions began to normalize and we achieved improved results in many of our lines of business.  Within our segments, we saw Technical Services deliver another solid quarter, achieving year-over-year growth as incineration utilization reached 91% and landfill volumes grew 25% on increased project work.”

 

“In our Industrial and Field Services segment, strength in our core Industrial business was offset by the negative translation impact of our Canadian operations into U.S. dollars,” McKim said. “The performance of our SK Environmental Services segment reflected the unfavorable weather, which caused abnormally high office closures, slowed customer demand and increased heating/maintenance costs.  Our Oil Re-refining and

 

GRAPHIC

 

42 Longwater Drive · P.O. Box 9149 · Norwell, Massachusetts 02061-9149 · 781.792.5000 · www.cleanharbors.com

 



 

Press Release

 

Clean Harbors Reports First-Quarter 2014 Financial Results

 

 

Recycling segment rebounded from year-end and demonstrated improvement as the quarter progressed, including some pricing gains in March after a significant decline in base oil pricing in January.  Our Oil and Gas Field Services segment performed as expected in the quarter despite softness in our seismic business and the unfavorable currency translation effect.”

 

“In conjunction with our fourth-quarter news release, we announced a number of initiatives aimed at lowering our cost structure and improving our returns,” McKim said. “Beyond the synergies that we already achieved through Safety-Kleen in 2013, we set a target of eliminating an additional $75 million in companywide expenses. Many of these programs are underway, and we remain on course to attain our full-year goal.  We also launched a series of margin improvement initiatives, such as actions related to our pay-for-oil (PFO) program.  During the first quarter, we lowered PFO costs by three cents per gallon from the fourth quarter and are encouraged by the efforts of that entire team.”

 

“We are focused on increasing our returns and recognizing the value presented by our own shares.  As a result, we launched the first stock buyback program in our Company’s history late in the first quarter.  The Board authorized a $150 million program that we intend to pursue going forward,” McKim said.

 

Business Outlook and Financial Guidance

 

“Looking ahead, we are optimistic about our prospects for 2014, and we believe the steps we are taking to address the challenges in our markets have set the Company on the path to recovery.  We are encouraged by some of the overall trends we are seeing in our businesses ranging from increasing volumes in our disposal network to improved base oil pricing and lower PFO in re-refining to the opening of new Safety-Kleen branches to opportunities in our core Industrial business lines.  Strength in a number of our key verticals such as Chemical, Manufacturing and Automotive also will support continuing improvement in our performance as the year progresses.  We have initiated two major operational changes that will drive organic growth and business development:  reconfiguring the sales organization for a greater emphasis on cross selling, and forming a new supply chain organization to enhance strategic sourcing and logistics. Overall, we are confident that the combination of our cost-reduction programs, margin enhancement activity and organic growth initiatives will deliver increased value to our shareholders,” McKim concluded.

 

Based on its first-quarter financial performance and current market conditions, Clean Harbors is reiterating its previously announced 2014 annual revenue and Adjusted EBITDA guidance.  The Company continues to expect 2014 revenues in the range of $3.5 billion to $3.6 billion and Adjusted EBITDA in the range of $525 million to $555 million.  A reconciliation of the Company’s Adjusted EBITDA guidance to net income guidance is included below.

 

GRAPHIC

 

42 Longwater Drive · P.O. Box 9149 · Norwell, Massachusetts 02061-9149 · 781.792.5000 · www.cleanharbors.com

 



 

Press Release

 

Clean Harbors Reports First-Quarter 2014 Financial Results

 

 

For the second quarter of 2014, the Company expects revenue in the range of $860 million to $880 million.  The Company expects to generate Adjusted EBITDA for the second quarter of 2014 in the range of $130 million to $135 million.  A reconciliation of the Company’s Adjusted EBITDA guidance to net income guidance is included below.

 

Non-GAAP Results

 

Clean Harbors reports Adjusted EBITDA results, which is a non-GAAP financial measure, as a complement to results provided in accordance with accounting principles generally accepted in the United States (GAAP).  The Company believes that Adjusted EBITDA provides additional useful information to investors since the Company’s loan covenants are based upon levels of Adjusted EBITDA achieved.  The Company defines Adjusted EBITDA in accordance with its existing credit agreement, as described in the following reconciliation showing the differences between reported net income and Adjusted EBITDA for the first quarter of 2014 and 2013 (in thousands):

 

 

 

For the three months ended:

 

 

 

March 31, 2014

 

March 31, 2013

 

 

 

 

 

 

 

Net income

 

$

8,960

 

$

10,502

 

Accretion of environmental liabilities

 

2,724

 

2,835

 

Depreciation and amortization

 

69,356

 

60,006

 

Other income

 

(4,178

)

(525

)

Interest expense, net

 

19,554

 

19,873

 

Pre-tax, non-cash acquisition accounting inventory adjustment

 

 

13,559

 

Provision for income taxes

 

5,570

 

4,978

 

Adjusted EBITDA

 

$

101,986

 

$

111,228

 

 

GRAPHIC

 

42 Longwater Drive · P.O. Box 9149 · Norwell, Massachusetts 02061-9149 · 781.792.5000 · www.cleanharbors.com

 



 

Press Release

 

Clean Harbors Reports First-Quarter 2014 Financial Results

 

 

Adjusted EBITDA Guidance Reconciliation

 

An itemized reconciliation between projected net income and projected Adjusted EBITDA is as follows:

 

 

 

For the Quarter Ending June 30, 2014

 

 

 

Amount

 

Margin % (1)

 

 

 

(In millions)

 

 

 

Projected GAAP net income

 

$

23

 

to

 

$

27

 

2.7

%

to

 

3.1

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accretion of environmental liabilities

 

3

 

to

 

3

 

0.4

%

to

 

0.3

%

Depreciation and amortization

 

70

 

to

 

68

 

8.1

%

to

 

7.7

%

Interest expense, net

 

20

 

to

 

20

 

2.3

%

to

 

2.3

%

Provision for income taxes

 

14

 

to

 

17

 

1.6

%

to

 

1.9

%

Projected Adjusted EBITDA

 

$

130

 

to

 

$

135

 

15.1

%

to

 

15.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues (In millions)

 

$

860

 

to

 

$

880

 

 

 

 

 

 

 

 

 

 

For the Year Ending December 31, 2014

 

 

 

Amount

 

Margin % (1)

 

 

 

(In millions)

 

 

 

Projected GAAP net income

 

$

94

 

to

 

$

119

 

2.7

%

to

 

3.3

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accretion of environmental liabilities

 

13

 

to

 

11

 

0.4

%

to

 

0.3

%

Depreciation and amortization

 

280

 

to

 

275

 

8.0

%

to

 

7.6

%

Interest expense, net

 

80

 

to

 

79

 

2.3

%

to

 

2.2

%

Provision for income taxes

 

58

 

to

 

71

 

1.6

%

to

 

2.0

%

Projected Adjusted EBITDA

 

$

525

 

to

 

$

555

 

15.0

%

to

 

15.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues (In millions)

 

$

3,500

 

to

 

$

3,600

 

 

 

 

 

 

 

 


(1)   The Margin % indicates the percentage that the line-item represents to total revenues for the respective reporting period, calculated by dividing the dollar amount for the line-item by total revenues for the reporting period.

 

GRAPHIC

 

42 Longwater Drive · P.O. Box 9149 · Norwell, Massachusetts 02061-9149 · 781.792.5000 · www.cleanharbors.com

 



 

Press Release

 

Clean Harbors Reports First-Quarter 2014 Financial Results

 

 

Conference Call Information

 

Clean Harbors will conduct a conference call for investors today at 9:00 a.m. (ET) to discuss the information contained in this press release.  On the call, management will discuss Clean Harbors’ financial results, business outlook and growth strategy.

 

Investors who wish to listen to the webcast and view the accompanying slides should visit the Investor Relations section of the Company’s website at www.cleanharbors.com.  The live call also can be accessed by dialing 201.689.8881 or 877.709.8155 prior to the start of the call.  If you are unable to listen to the live call, the webcast will be archived on the Company’s website.

 

About Clean Harbors

 

Clean Harbors (NYSE: CLH) is North America’s leading provider of environmental, energy and industrial services. The Company serves a diverse customer base, including a majority of the Fortune 500, across the chemical, energy, manufacturing and additional markets, as well as numerous government agencies. These customers rely on Clean Harbors to deliver a broad range of services such as end-to-end hazardous waste management, emergency spill response, industrial cleaning and maintenance, and recycling services. Through its Safety-Kleen subsidiary, Clean Harbors also is North America’s largest re-refiner and recycler of used oil and a leading provider of parts washers and environmental services to commercial, industrial and automotive customers. Founded in 1980 and based in Massachusetts, Clean Harbors operates throughout the United States, Canada, Mexico and Puerto Rico. For more information, visit www.cleanharbors.com.

 

Safe Harbor Statement

 

Any statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “estimates,” “projects,” or similar expressions. Such statements may include, but are not limited to, statements about future financial and operating results, and other statements that are not historical facts. Such statements are based upon the beliefs and expectations of Clean Harbors’ management as of this date only and are subject to certain risks and uncertainties that could cause actual results to differ materially, including, without limitation, those items identified as “risk factors” in Clean Harbors’ most recently filed Form 10-K and Form 10-Q. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements. Clean Harbors undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements other than through its filings with the Securities and Exchange Commission, which may be viewed in the “Investors” section of Clean Harbors’ website at www.cleanharbors.com.

 

GRAPHIC

 

42 Longwater Drive · P.O. Box 9149 · Norwell, Massachusetts 02061-9149 · 781.792.5000 · www.cleanharbors.com

 



 

Press Release

 

Clean Harbors Reports First-Quarter 2014 Financial Results

 

 

Contacts:

 

 

 

James M. Rutledge

Jim Buckley

Vice Chairman, President and CFO

SVP Investor Relations and Corporate Communications

Clean Harbors, Inc.

Clean Harbors, Inc.

781.792.5100

781.792.5100

InvestorRelations@cleanharbors.com

Buckley.James@cleanharbors.com

 

GRAPHIC

 

42 Longwater Drive · P.O. Box 9149 · Norwell, Massachusetts 02061-9149 · 781.792.5000 · www.cleanharbors.com

 



 

Press Release

 

Clean Harbors Reports First-Quarter 2014 Financial Results

 

 

CLEAN HARBORS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands except per share amounts)

 

 

 

For the three months ended:

 

 

 

March 31, 2014

 

March 31, 2013

 

 

 

 

 

 

 

Revenues

 

$

846,667

 

$

862,163

 

Cost of revenues (exclusive of items shown separately below)

 

625,719

 

636,024

 

Selling, general and administrative expenses

 

118,962

 

128,470

 

Accretion of environmental liabilities

 

2,724

 

2,835

 

Depreciation and amortization

 

69,356

 

60,006

 

Income from operations

 

29,906

 

34,828

 

Other income

 

4,178

 

525

 

Interest (expense), net

 

(19,554

)

(19,873

)

Income before provision for income taxes

 

14,530

 

15,480

 

Provision for income taxes

 

5,570

 

4,978

 

Net income

 

$

8,960

 

$

10,502

 

Earnings per share:

 

 

 

 

 

Basic

 

$

0.15

 

$

0.17

 

Diluted

 

$

0.15

 

$

0.17

 

 

 

 

 

 

 

Shares used to compute earnings per share — Basic

 

60,720

 

60,464

 

Shares used to compute earnings per share — Diluted

 

60,861

 

60,630

 

 

GRAPHIC

 

42 Longwater Drive · P.O. Box 9149 · Norwell, Massachusetts 02061-9149 · 781.792.5000 · www.cleanharbors.com

 



 

Press Release

 

Clean Harbors Reports First-Quarter 2014 Financial Results

 

 

CLEAN HARBORS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

 

March 31, 2014

 

December 31, 2013

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

249,007

 

$

310,073

 

Marketable securities

 

213

 

12,435

 

Accounts receivable, net

 

566,394

 

579,394

 

Unbilled accounts receivable

 

40,832

 

26,568

 

Deferred costs

 

16,523

 

16,134

 

Inventories and supplies

 

152,443

 

152,096

 

Prepaid expenses and other current assets

 

56,677

 

41,962

 

Deferred tax assets

 

32,469

 

32,517

 

Total current assets

 

1,114,558

 

1,171,179

 

Property, plant and equipment, net

 

1,588,286

 

1,602,170

 

Other assets:

 

 

 

 

 

Deferred financing costs

 

20,036

 

20,860

 

Goodwill

 

565,062

 

570,960

 

Permits and other intangibles, net

 

557,211

 

569,973

 

Other

 

18,802

 

18,536

 

Total other assets

 

1,161,111

 

1,180,329

 

Total assets

 

$

3,863,955

 

$

3,953,678

 

Current liabilities:

 

 

 

 

 

Current portion of capital lease obligations

 

$

1,119

 

$

1,329

 

Accounts payable

 

284,768

 

316,462

 

Deferred revenue

 

56,469

 

55,454

 

Accrued expenses

 

213,096

 

236,829

 

Current portion of closure, post-closure and remedial liabilities

 

31,866

 

29,471

 

Total current liabilities

 

587,318

 

639,545

 

Other liabilities:

 

 

 

 

 

Closure and post-closure liabilities, less current portion

 

40,809

 

41,201

 

Remedial liabilities, less current portion

 

144,485

 

148,911

 

Long-term obligations

 

1,400,000

 

1,400,000

 

Capital lease obligations, less current portion

 

913

 

1,435

 

Deferred taxes, unrecognized tax benefits and other long-term liabilities

 

244,795

 

246,947

 

Total other liabilities

 

1,831,002

 

1,838,494

 

Total stockholders’ equity, net

 

1,445,635

 

1,475,639

 

Total liabilities and stockholders’ equity

 

$

3,863,955

 

$

3,953,678

 

 

GRAPHIC

 

42 Longwater Drive · P.O. Box 9149 · Norwell, Massachusetts 02061-9149 · 781.792.5000 · www.cleanharbors.com

 



 

Press Release

 

Clean Harbors Reports First-Quarter 2014 Financial Results

 

 

Supplemental Segment Data (in thousands)

 

 

 

For the three months ended:

 

 

 

March 31, 2014

 

March 31, 2013

 

Revenue

 

Third Party
Revenues

 

Intersegment
Revenues, net

 

Direct
Revenues

 

Third Party
Revenues

 

Intersegment
Revenues, net

 

Direct
Revenues

 

Technical Services

 

$

236,781

 

$

37,833

 

$

274,614

 

$

233,939

 

$

25,271

 

$

259,210

 

Oil Re-refining and Recycling

 

137,986

 

(56,213

)

81,773

 

146,931

 

(56,561

)

90,370

 

SK Environmental Services

 

152,322

 

27,996

 

180,318

 

152,955

 

41,489

 

194,444

 

Industrial and Field Services

 

215,676

 

(10,957

)

204,719

 

221,418

 

(13,218

)

208,200

 

Oil and Gas Field Services

 

103,751

 

1,850

 

105,601

 

116,696

 

3,942

 

120,638

 

Corporate Items (1)

 

151

 

(509

)

(358

)

(9,776

)

(923

)

(10,699

)

Total

 

$

846,667

 

$

 

$

846,667

 

$

862,163

 

$

 

$

862,163

 

 


(1)  Corporate Items revenue for the three months ended March 31, 2013 includes one-time, non-cash reductions of approximately $10.2 million due to the impact of fair value acquisition accounting adjustments on Safety-Kleen’s historical deferred revenue at December 28, 2012. Revenue for the five reportable segments for the three months ended March 31, 2013 excludes such adjustments to maintain comparability with future operating results and reflect how the Company manages the business.

 

Non-GAAP Segment Results

 

Clean Harbors reports Adjusted EBITDA results, which is a non-GAAP financial measure, as a complement to results provided in accordance with accounting principles generally accepted in the United States (GAAP) and believes that such information provides additional useful information to investors since the Company’s loan covenants are based upon levels of Adjusted EBITDA achieved. The Company defines Adjusted EBITDA in accordance with its existing credit agreement. See “Non-GAAP Results” above for a reconciliation of the Company’s total Adjusted EBITDA to GAAP net income.

 

 

 

For the three months ended:

 

Adjusted EBITDA

 

March 31, 2014

 

March 31, 2013

 

 

 

 

 

 

 

Technical Services

 

$

62,177

 

$

60,045

 

Oil Re-refining and Recycling

 

13,432

 

15,312

 

SK Environmental Services

 

21,976

 

27,040

 

Industrial and Field Services

 

34,141

 

36,346

 

Oil and Gas Field Services

 

16,299

 

27,551

 

Corporate Items

 

(46,039

)

(55,066

)

Total

 

$

101,986

 

$

111,228

 

 

GRAPHIC

 

42 Longwater Drive · P.O. Box 9149 · Norwell, Massachusetts 02061-9149 · 781.792.5000 · www.cleanharbors.com